Competition Bureau Helpless to Stop Highest Concentration of Private Community Medical Lab Service in North America

(Toronto) The federal Competition Bureau’s decision not to stop a takeover that would give Ontario the highest private concentration of community medical lab services in North America puts more pressure on the provincial government to act, said Gerard Kennedy, spokesperson for the Ontario Coalition for Lab Reform (OCLR).

The Coalition was reacting today to the recent Competition Bureau’s provision of a no­-action letter for the proposed $1.2 billion takeover of CML by Lifelabs to create a giant ‘Mega­Lab’ controlling testing for an unprecedented 2 out of 3 Ontarian’s outside hospitals. While the Bureau does not release its reasons, “it became clear to members of the Coalition that the mega–lab benefited generously from the ‘regulated conduct defense’ or ‘the government-­made­-me-­do-­it’ clause limiting the Bureau’s authority,” Kennedy adds.

A peculiar, 15 year old Ontario regulation gives away locked­-in market shares to large private lab companies in Ontario without assurances on performance. The regulation was originally condemned by the Competition Bureau, for reasons now fully realized: access has suffered (closure of over 100 patient lab service centres); laboratories have been consolidated (from 27 to 9); and excessive profits generated for large private corporations from public funds (as high as 40%). The OCLR contends a Mega­-Lab would only worsen these trends.

“In Ontario today we have the worst of both worlds. Not enough competition to ensure value and the wrong kind of regulation to provide effective oversight,” said Kennedy, who is also CEO of Alpha Healthcare/Alpha Laboratories. “Without fair, managed competition, Lifelabs will be buying the rights to control an essential medical service and to take advantage of the Ontario government, patients and the public alike.”

Unless the Ontario government uses its powers to protect community patients, Lifelabs would quadruple its monopoly control from 15 communities to over 65 across the province. The deal is set to be voted on by CML shareholders September 3.

The Ontario Coalition for Lab Reform is comprised of smaller owner operated community laboratories, non­profit organizations, allied service groups and concerned professionals who want to see a modern, patient­centred medical laboratory system established in Ontario.